Netflix, Inc. (NFLX)

chrisryan333 (70.26) Submitted: 4/18/07 4:29 PM

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I agree and recently read that Netflix has made a move toward video download on demand with a recent hire. This tells me that they recognize the techno threat. However, as someone who lives about 3 miles from any dsl or highspeed internet, I can tell you that millions of us are not headed to download soon.

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prose976 (< 20) Submitted: 7/25/07 1:09 AM

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The Fools did a huge dis-service to Stock Advisor subscribers with this one and with TOMO. Just look at the Stock Advisor track record....they're resting on their laurels from the recovery period after 911. The Stock Advisor is performing en par at best compared to the S & P. And another thing...just look at all these NFLX bulls in CAPs. This is so misleading I am beside myself. Through being Foolish and following the Fool. Philip

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SBeren (< 20) Submitted: 8/31/07 4:23 PM

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I just don't understand how it is a scalable business model. You're right on the money when it comes to the Threat. Apple iTunes, Amazon/TIVO, VZ Fios, Google Youtube, etc... are all becoming and/or will become the main players in delivering movies in the next few years. Which is why a company that specializes in sending out DVDs by snail mail is not primed to compete with those companies.

When it came to sending out DVDs by mail, Netflix had a first mover advantage. With streaming media they will be penetrating a market in which companies spend on R&D what Netflix makes up in market cap, whose customer base is multiples that of netflix, and companies whose size would allow them to compete (at a loss if necssary) at much more aggressive price points for a longer period of time.

Strong Financials and Management incentive is a moot point. At best, those 2 factors will delay the inevitable.

It was a good company with a great business model, but when you look forward at the shift in the market I would not put my money behind a soon-to-be archaic method of movie distribution.

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Denysnmd (89.32) Submitted: 10/30/07 10:42 PM

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If by "archaic method of movie distribution", you are referring to movements towards VOD, I think you may be in for an unpleasant surprise.

1) Much of America still does not have the bandwidth available to it for VOD. Blu-ray and HDDVD will make bandwidth even more imperative.

2) Most people do not want to watch their movies on a PC and especially those who have invested in large flat-screen HD TV's.

3) The business model for the studios to create a DVD is NOT for rental businesses but unit sales. Since VOD cannot show the extras, the commentary tracks, the deleted scenes, the DVD will still be in demand by a significant segment of the population. But, beyond that, to keep sales up, I believe the studios will continuously create more and more compelling extras; especially ones that do not lend themselves to VOD. Why should a studio create a DVD for just Blockbuster and Netflix when they can make one to sell to hundreds of thousands of people? VOD will fight this battle for a very long time. And, when VOD is finally ready to conquer the DVD, the studios will be ready to supply the VOD directly themselves.

In summary, I believe VOD is EXTREMELY overrated. I believe the market NFLX competes in will continue to fragment. I believe NFLX as a stock will move only in a trading range as this debate on VOD continues. I think the opportunities to make money are so much greater elsewhere.

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